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Wednesday, August 31, 2005

Vulgar Libertarianism Watch, Part XI

Cameron Carswell at the Globalization Institute:

There is a myth that the status of the richer countries of the world has somehow come at the expense of the poorer ones, and that the only way for the poorer nations to climb the ladder is for massive transfers of wealth to occur.

This conflates two separate claims. If the status of the richer countries has come at the expense of the poorer ones through state intervention in the market, then the only way for the poorer nations to climb the ladder is to replace neo-mercantilist institutions like the World Bank, IMF, and WTO, and other forms of political intervention by the West, with a genuine Cobdenite free market. What the neoliberals call "free trade" is really Palmerstonianism: state loans to subsidize foreign capital investment by underwriting the operating expenses of plants overseas, and gunboat diplomacy to prop up anti-labor governments and protect investments at taxpayer expense. Once again, I quote Joseph Stromberg:




Carswell continues:

When a rich country trades with a poor one, the rich one gets richer, the other gets poorer. There is, according to this view, a fixed quantity of wealth....

Nonsense. All that "this view" requires is a state-enforced system of unequal exchange. By definition, state intervention in the market creates a zero sum game in which one party uses coercion to benefit at the other's expense. The mutually beneficial, Pareto-optimal form of trade requires uncoerced exchange--about as far from the neoliberal regime as you can get.
Rather the development of China occurred due to a simple combination of a move toward free markets coupled with an opening of the country to foreign trade and investment. In short, China embraced globalization rather than trying to fence the world out, engaging in a massive programme of unilateral liberalization.

And political repression to keep sweatshop labor docile (there's a reason the only union Wal-Mart likes is the Chinese state labor federation--you know, the one that belonging to won't get you committed to a mental hospital); to protect industrial polluters from liability to local communities; and to suppress protests against the seizure of ordinary people's land to give to politically connected businesses:

Each week brings news of at least one or two incidents, with thousands of villagers in a pitched battle with the police, or bloody crackdowns in which hundreds of protesters are tear-gassed and clubbed during roundups by the police. And by the government's own official tally, hundreds of these events each week escape wider public attention altogether....

Last week, for example, the government announced it was setting up special police units in 36 cities to put down riots and counter what the authorities say is the threat of terrorism....

The entire campaign appears to have been kicked off with a strongly worded recent editorial, published in People's Daily, the Communist Party's mouthpiece, under the headline "Maintain Stability to Speed Development." The commentary warned citizens to obey the law, saying threats to social order would not be tolerated.

In the last two weeks, the demonstrations have come to Shanghai, a showcase city that is among the country's most tightly policed, and where public protests are relatively rare.

Day after day recently, the angry complaints of citizens could be heard in the heart of downtown here, especially across the street from the elegant exhibition center where city government was in session. In one protest, middle-aged residents invoked rebellious slogans from their youth during the Cultural Revolution, reportedly saying things like "to rebel is just" as they denounced summary evictions to make way for high-rise developers and demanded fair compensation....

In China, cases of dangerous industrial pollution are rife, even if their full human toll is not yet known. But local authorities often side with industrial interests, and the courts provide little relief....

Golly, aren't "free markets" grand?

This serves as a reminder that those countries that accept the globalization process can expect to be rewarded with higher living standards and rates of economic growth, and illustrates the fact that a country can create wealth, and such gains do not come at the expense of other nations.

Another mindless identification of "the globalization process" with free trade and free markets, regardless of who's paying for it. Get this through your head: increased "trade" is good only if it's worth it to people voluntarily spending their own money, and internalizing all their own risks and costs, without government protection or subsidies. "Trade" that exists because of government efforts to make it artificially profitable is nothing but parasitism and theft.

I close with a quote from Sean Gabb:



This is not market liberalism. It is a fraud played on us all by our ruling classes – these being those politicians, bureaucrats, educators, lawyers and media and business people who derive wealth, power and status from an enlarged and activist state.

Please note, Mr. Carswell: that is what free market advocacy--as opposed to by-the-numbers corporate agitprop--looks like!

Tuesday, August 30, 2005

Neoliberal Reaction and the "Workhouse Economy"

I just found a great article by Doug Henwood in an old issue of Left Business Observer: "The New Economy and After"

Let's look at the world of work, which is where the late 1990s productivity revolution was happening. If we are in the early stages of a technorevolution, we're certainly not distributing its dividends in the form of a lighter workload: Americans have to work awfully hard to make ends meet. While average incomes have risen considerably over the last half-century - rapidly for the first twenty-five years after World War II, far more slowly thereafter - the amount of work necessary to earn those incomes has risen with equal relentlessness. A worker paid the average manufacturing wage would have had to work sixty-two weeks to earn the median family's income in 1947. In 1973, it would have taken seventy-four weeks; in 2001, eighty-one weeks. So, despite the fact that productivity overall is up more than threefold over the last fifty years, the average worker would have to toil six months longer to make the average family income than he or she did half a century earlier. And the increase in the work effort came at a more punishing pace in the 1990s than it did in earlier decades. Of course, it's not just individual workers who are putting in longer hours; an ever-larger share of the adult population has entered the paid workforce - mainly women, who aren't getting much relief in their household labors to compensate for their increased presence in factories and offices.

International comparisons confirm the picture of the U.S. as a workhouse economy. American workers put in more hours per year than do workers in Western Europe; only workers in East Asia spend more time on the job than do Americans. And our workers don't produce as impressively as people seem to think. Workers in the Netherlands, Germany, France, and Italy all produce more in an hour than do their American counterparts; Americans come in barely ahead of workers in Ireland and Sweden. Nor has the growth in U.S. productivity over the recent past been all that impressive; in a 1999 IMF study of nineteen major countries, the U.S. came in dead last in productivity growth between 1973 and 1996. It's only over the latter part of the 1990s that U.S. productivity performance ran ahead of that of its peers - though not all that far ahead, if you use comparable statistics, as more recent work for Credit Suisse First Boston by Julian Callow shows.

Why does productivity matter? Over the long term, rising productivity is what makes possible rising living standards. Possible, not inevitable; productivity gains in money form have to be divided between profits and wages. And for most Americans, the late 1990s were pretty good times, but hardly miraculous. Incomes rose modestly, but not spectacularly. And although productivity has continued to rise, according to the official stats, in the recent recession and so-called recovery, it certainly doesn't feel too good to most of us. Wage gains have disappeared. The latest chapter in the productivity miracle is more about overwork and speedup than any technological wonder. We're back where we were 100 words ago - in the workhouse economy. Or, to quote New York Times reporter Alan Cowell, the American way of economic life is all about "working longer for less."

Again, this is the result of reduced bargaining power of labor, brought about largely through state policies. Henwood quotes Michal Kalecki on the unacceptability of full employment from the perspective of the state capitalist ruling class:

[U]nder a regime of permanent full employment, the "sack" would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension.

Henwood elaborates:

That would mean the loss of "discipline in the factories" and would put "political stability" at risk - which sounds a lot like the 1970s, from the factory floor to the global scene. It looked like a loss of discipline in the whole social factory.

That indiscipline was met with the rightwing ascendancy of the late 1970s, a massively successful campaign of wage cutting, union busting, and public sector austerity on a global scale.

I wrote about that "ascendancy" myself--the shift in elite consensus in the 1970s from corporate liberalism to neo-liberalism--in a subsection of Chapter Eight of Studies in Mutualist Political Economy: "Neoliberal Reaction and Political Repression"

Mutual Aid in Africa

Via Adam, by way of Marginal Revolution. The sick benefit society, mainly a historic curiosity preserved in the pages of Kropotkin and E.P. Thompson, is apparently making a comeback in Africa. According to the New York Times, it's being brought about by "everyday Africans who are tired of waiting for politicians to address their needs and have begun spinning their own safety nets."

Plans in which neighbors come together and create their own makeshift health coverage are the rage in Africa, particularly in the continent's west. Here, the plans now have a significant presence in 11 countries and membership has grown beyond 200,000 people.

Some of these mutual health organizations, as they are known, include fewer than 100 beneficiaries. The tiny group negotiates with a local clinic and forges a better price for care. Others have linked dozens of community groups to produce sophisticated plans that cover 10,000 or more people and offer an array of services.

"Every day there's a new group," said Olivier Louis Dit Guerin, who helps set up these microinsurance plans as part of a program run by the Labor Organization. "They're growing and growing to fill the big gap."

Membership in one such mutual, described in the article, entitles the holder and her family to
free consultations at the clinic down the road, cut-rate medicine and peace of mind. The chances are lower now that a bout of illness will bring the family to total ruin.

The financing arrangement with an individual clinic is getting pretty close to what I wrote about earlier: the involvement of mutuals not only in the cooperative finance of healthcare, but in organizing delivery of service.

Monday, August 29, 2005

Worker Co-Determination in Venezuela

Via Meat Eating Leftist (and also Richard Blair at Uncapitalist Journal). The Beeb reports on Hugo Chavez's co-management program.

So far, Venezuela's co-management plans have been confined to state owned companies like Alcasa, and to two small private companies that had already gone bankrupt....

But last Mayday President Hugo Chavez said he wanted to go further.

He suggested that many more private companies might qualify for government assistance if they too involved their workers in the management.

I'm setting aside the state's role in implementing the program. I will note in passing, however, that Murray Rothbard at one point suggested that nationalization might be acceptable as an intermediate step in worker homesteading of state capitalist industry. As for the use of state funds to bail out failing companies, I'm unequivocally against.

Leaving that issue aside, however, what's interesting is the practical effect of worker control on the efficiency of an enterprise. Here's what the BBC has to say about the Alcasa aluminum plant:

During a session at Rodding Shed No. 3, one elected representative from each area team work amid reams of statistics, charts sketched on the white board and scale models.

The representatives are discussing possible solutions to their department's biggest technical problem; how to reorganise maintenance and procurement in order to get a longer working life out of the graphite anodes, the components used to separate the pure aluminium.

According to the man steering this whole process, one of the aims of co-management is to break down the barriers between intellectual and physical labour; between those who do the thinking and those who do the work.

Carlos Lanz, recently appointed president of Alcasa, and himself a former guerrilla leader, says the results are already visible.

"Democratic planning is such a powerful lever that even with rather outdated technology we have managed to increase production by 11%," he says.

Mr Lanz points out that this is not the co-management of European social democracy, which in his view has been limited to giving the workers shares and a seat on the board.

"This is about workers controlling the factory and that is why it is a step towards socialism of the twenty-first century."

The increased productivity at Alcasa reflects a fairly common pattern in experiments with worker control. The various contributors to Sam Dolgoff's magnificent collection, The Anarchist Collectives, described similar experiences by worker-controlled enterprises in anarchist Spain. As to why this might be, I recently devoted an extended post to examining the question: On the Superior Efficency of Small-Scale Organization.

Sunday, August 28, 2005

Robin Hahnel on Social Democracy

This has been sitting in the blog hopper for quite a while waiting for me to do something with it, but it's too good to send down the memory hole just because it's old. Via Ecodema, Robin Hahnel had an interesting article on social democracy at ZMag.

I mean it as a great compliment when I say that capitalism functions poorly indeed without social democrats. The "golden age of capitalism" was due more to the influence social democrats exerted over capitalism than any other single cause. Only when social democratic policies have been ascendant has capitalism proved able to avoid major crises and distribute the benefits of rising productivity widely enough to sustain rapid rates of economic growth and create a middle class. Political democracy in the twentieth century also received more nurturing from social democratic parties than from any other single source.

True as far as it goes. Corporate liberalism and European-style social democracy are solutions to state capitalism's crises of over-accumulation and underconsumption. But these solutions, in turn, lead directly to the crisis of under-accumulation and the fiscal crisis of the state. Each state intervention, spurred by crises resulting from previous state interventions, triggers still more crises that require further state intervention....

Capitalism, to the extent that it deviates from a free market, is a system of government intervention in the market to redistribute wealth to privileged classes. Besides shifting some of labor's product to pay state-enforced monopoly returns on land and capital, it subsidizes accumulation and corporate operating expenses. The result is the maldistribution of purchasing power remarked on by Hobson and Keyes, and the production of more goods than overbuilt industry can dispose of in a free market. To deal with these crises, the state adopts still more intervention in the form of a corporate liberal welfare state and social compact with labor, and through military and highway spending, etc., buys up more and more of industry's surplus product. But, as pointed out by James O'Connor and Paul Mattick, these policies lead to growing state budgets, chronic deficits, and an unacceptably high bargaining power of labor. As a result, industry has a reduced ability both to realize existing investments and to undertake further accumulation. The state capitalist elite's response: neoliberal reaction, which in turns leads to resumed income polarization and under-consumption, which leads..., etc., etc.

And since over-accumulation and under-consumption are the fundamental underlying tendencies of state capitalism, there are limits to the feasibility of neoliberal reaction. It is simply impossible to go back to pre-New Deal, or pre-WWI, levels of state spending without a depression that would disintegrate state capitalism. That's why the GOP, despite all its calls for "welfare reform" and union busting, is dominated by big government conservatives. Besides the basic crisis of over-accumulation, fiscal crisis and accumulation crisis are built into the system as secondary effects, as well. The state managers are left with a dilemma: how to ensure the aggregate purchasing power necessary to prevent overproduction, and spend enough money to make capital profitable, without creating 1970s-style stagflation. Since it's impossible to fully do both at the same time, the system is in permanent crisis.

Of course, the state capitalists are always tempted to try solving the crisis by abandoning market exchange altogether, acting through the state, and completely obliterating the distinction between private industry and the state. Fascism represented such an attempt, as described by Theodor Adorno.

Hahnel goes on to examine Michael Harrington's survey of the reasons for social democracy's strategic failure in the twentieth century. Among my favorites:

The Pitfalls of Gradualism: I think Harrington's third reason for social democratic failures is critical. He points out that even when social democrats realized they were "stuck with gradualism and all its attendant problems," and responded in the only sensible way -- "have socialists permeate the society from top to bottom" -- unfortunately they "overlooked one of capitalism's most surprising characteristics: its ability to co-opt reforms, and even radical changes, of the opponents of the system." (SP&F: 24) Harrington clearly understands the problem well. He points out: "Capitalists themselves were, in the main, not shrewd enough to maneuver in this way. The American corporate rich fought Roosevelt's functional equivalent of social democracy with a passionate scorn for the 'traitor to his class' who was President. Yet these same reactionaries benefited from the changes that the New Deal introduced far more than did the workers and the poor who actively struggled for them. The structures of capitalist society successfully assimilated the socialist reforms even if the capitalists did not want that to happen." (SP&F: 25)

Harrington underestimates the shrewdness of the capitalists, I think. A major part of the corporate liberal coalition, as described by G. William Domhoff, was capital-intensive, high-tech, export-oriented industry. Just Google "Gerard Swope" and you'll see what I mean.

And the co-optation of "progressive" intellectuals goes back a lot further than the New Deal. The managerial New Class had been incorporated as overseers of the newly corporatized economy in the late 19th century. And by the "Progressive" Era, Crolyite social engineers and wordsmiths had been entirely co-opted as useful idiots for organized capital.

Global Capital Markets: The 900 Pound Gorilla: Finally, Harrington tells us social democrats were "utterly unprepared for the internationalization of politics and economics that has been one of the decisive trends of the twentieth century." (SP&F: 25) In particular Harrington blames the failure of the socialist government of Francois Mitterrand in France in the early 1980s primarily on hostile global capital markets. "The failure of the bold plans of the Mitterrand government in 1981-82 were caused, above all, by an open economy that had to bow to the discipline of capitalist world markets rather than follow a program that had been democratically voted by the French people." (SP&F: 27) The extent to which social democratic reforms in a single country can be vetoed by global financial markets in the neoliberal era is of great importance to consider carefully.

A mushrooming pool of liquid global wealth -- created by record profits due to stagnant wages, downsizing, mega mergers, and rapid technical innovation in computers and telecommunications -- is now more free to move in and out of national economies at will than at any time in history.... Neoliberal global managers have literally created the financial equivalent of the proverbial 900 pound gorilla: Where does the 900 pound gorilla -- global liquid wealth -- sit? Wherever it wants! And when a derivative tickles, and savvy investors -- who realize they are functioning in a highly leveraged, largely unregulated credit system -- rush to pull out before others do, currencies, stock markets, banking systems, and formerly productive economies can all collapse in their wake. What this does, of course, is give international investors a powerful veto over any government policies they deem unfriendly to their interests. If neoliberal global capitalism could trump Mitterrand's program in an advanced economy like France that was not facing international bankruptcy in the early 1980s, and forced the most powerful of all social democrats in Sweden to abandon their reforms in the late 1980s and early 1990s, what hope is there for social democratic programs that attempt to spur equitable growth in bankrupt third world economies facing even more powerful global financial markets and an even more implacable IMF in the early twenty-first century?

This is something Immanuel Wallerstein has commented on as well. So long as capitalism functions as a world system, any would-be non-capitalist system on the scale of a single country will be incorporated into the capitalist world-system. No matter how anti-capitalist a Latin American firebrand may be, his first order of business will be meeting the men in suits from the World Bank and IMF. (And I say this without much sympathy for the kinds of "anti-capitalists" that Hahnel and Harrington describe: social democrats and other statists. But a Tuckerite free market, were it to become the dominant anti-capitalist paradigm in the Third World, would sound the death knell of neoliberal corporate capitalism with far more finality than anything Lula or Chavez can come up with.)

Of course, Hahnel and Wallerstein both probably exaggerate the problem because they share unwarranted assumptions about the role of technical imperatives in economic centralization. A decentralized economy applying the latest biointensive techniques to subsistence farming, adopting intermediate-scale technologies, and producing most of its manufactured goods in the kinds of small, multi-use factories described by Kirkpatrick Sale and Murray Bookchin (see The Superior Efficiency of Small-Scale Organization), could probably function quite well with greatly reduced inputs from the developed world. There is, however, some value in coordination between a number of such countries, in order to reduce their political isolation. I've written about it before (The Revolution is Not Being Televised).

In another interesting passage, Hahnel describes the limited effectiveness of reforms in workplace governance, when the "socialized" workplace not only functions within a global capitalist financial system, but is under the same corporate management it was before:

Proclaiming themselves different from social democrats elsewhere in Europe who had long since abandoned nationalization, the French socialists went through with an impressive list of nationalizations they had promised during the election campaign. Again the courage displayed by the nationalizations is hard to fault. However, besides the fact that many of the companies they took over were much weaker than they realized, two other problems limited benefits from the nationalizations. Harrington tells us: "At the cabinet meeting at which the decision was made to go ahead with the nationalizations, there was a fateful debate that pitted Michel Rocard, Jacques Delors, and Robert Badinter against most of the rest of the ministers and, the decisive factor, against the president. There is no need, Rocard and Delors argued, for Paris to pay for one-hundred percent of an enterprise that is targeted for government ownership. Fifty percent is quite enough -- and much less expensive. But Mitterrand went ahead with one-hundred percent buy outs." (NL: 136-137) Harrington points out that the consequences were not dissimilar to corporate takeovers with borrowed money in the United States -- "the acquired company had to be starved for cash in order to finance its own acquisition." (NL: 137) The second problem, how the newly nationalized companies were managed, was caused, in part, by the first. Harrington quotes from a letter sent to the new administrators which said: "You will seek, first of all, economic efficiency through a constant bettering of productivity. The normal criteria of the management of industrial enterprises will apply to your group. The different activities should realize results that will assure the development of the enterprise and guarantee that the profitability of the invested capital will be normal." (NL: 136-137.) In other words, the new managers were given marching orders no different than those stockholders would send to a CEO they had just hired! Harrington goes on to tell us: "Alain Gomez, a founder of the Marxist left wing of the Socialist party, CERES, and a new official in the public sector, was even blunter: 'My job is to get surplus value." (NL: 136)

The problem is, of course, that if capitalists are paid the full present discounted value for their assets, and if nationalized enterprises are managed no differently than private enterprises, the only thing that will change is who employees and taxpayers will resent. Instead of resenting greedy capitalists they will resent the "socialist" government, the "socialist" ministers, and their new "socialist" bosses. Like Harrington, I can understand this is easier to see from the outside free from budgetary and managerial pressures, but it is true nonetheless. Moreover, the government's efforts to promote decentralization and worker participation were no more successful in state enterprises than in the private sector. Harrington tells us: "Although the Auroux laws were unquestionably progressive, they fell far, far short of the ideal of self-managed socialism. In essence, the workers were given the right to speak up on issues affecting their industry -- which was a gain -- but they got no power to make decisions. One of the consequences of genuine worker control is that productivity goes up. But given the extremely limited nature of the workers' new rights -- and the mood of moroseness that settled over the society not too long after the euphoria of May 1981 -- that pragmatic bonus from living up to an ideal was not forthcoming." (NL: 137) Unfortunately the administrators of newly nationalized enterprises who received the letter quoted above were no more inclined than their counterparts in the private sector to accede power to make decisions to their employees from whom they were busy extracting "surplus value."

I've commented on the same problem as faced by cooperative enterprises in a larger capitalist economy. Unless they can build a mutually supporting network of production, consumption, and financial entities--in effect an embryonic system to supplant the old one--they are certain to be coopted into a capitalist framework.

As far as social democracy goes, this shows another weakness of that ideology: its managerialism. Social democracy is, fundamentally, an ideology of the New Class. The co-optation of "progressive" intellectuals so sorely lamented by Harrington and Hahnel says something, not only about their naivete and the cunning of the capitalists, but of their own mendacity as well. It's a lot easier to con a greedy man. And from the beginning, the New Class' idea of do-goodism has entailed giving themselves a lot of power to regiment and plan everybody else "for their own good." As Hilaire Belloc predicted, if "progressive" intellectuals were given an outlet for these authoritarian instincts within the state capitalist system, in effect hired as overseers for the capitalists, they would forget most of their big ideas about expropriation and other major structural changes. They would quickly redefine the interests of the "working class" to suit whatever was feasible within the existing system, with themselves running it.

Thursday, August 25, 2005

Land Value Tax Reconsidered

Mike Renzulli at Radical Liberal, coming from what I think is a fairly mainstream (i.e., not geolib) libertarian background on taxation, has an interesting post on his reconsideration of the land value tax.

Wednesday, August 24, 2005

Cooperative Economics at B.C. Politics

B.C. Politics is well worth checking out--especially the New Economics page.

I especially recommend "Towards a New Economics for British Columbia," by Peter P. Dimitrov (Part I; Part II).

And check out this excerpt from Helena Norberg-Hodge's "Foreword" to What Everybody Wants to Know About Money:

Despite massive public awareness campaigns and educational efforts, the environment continues to deteriorate from year to year, communities and families fragment, ethnic conflict, poverty, crime and violence continue to grow, and democracy slips away Economic globalisation is having a disastrous impact-socially, politically and environmentally. But globalisation is far from a natural process: it is occurring because governments are actively promoting it and subsidising the framework necessary to support it. What is needed now is fundamental shift in direction towards economic localisation.

Many people find it difficult to imagine a shift towards a more local economy. 'time has moved on,' one hears: 'We live in a globalised world'. Many such misconceptions can make the shift towards the local seem impractical or utopian. An emphasis on the local economy, for example, can easily be misconstrued as meaning total self-reliance on a village level, without any trade at all. But the most urgent issue today is not whether people have oranges in cold climates, but whether their wheat, their eggs, their milk - in short , their basic food needs - should travel thousands of miles when they could all be produced within a fifty-miles radius. The goal of localisation would not to eliminate all trade, but to reduce unnecessary transport while encouraging changes that would strengthen and diversify economics at the community as well as national level.

Another stumbling block is the belief that people in the south need access to Northern markets in a globalise economy to shift them out of poverty, and that a greater degree of self reliance in the North would therefore undermine the economies of the Third World. The truth of the matter is that a shift towards smaller-scale and more localised production would benefit both North and South - and facilitate meaningful work everywhere. The globalised economy requires the South to send a large portion of its natural resources to the North as raw materials; its best agricultural land must be devoted to growing food, fibres and flowers for the North. Rather than further impoverishing the South, producing more ourselves would allow the South to keep more of its resources, labour and production for itself. Globalisation means pulling millions of people away from sure subsistence in a land-based economy into urban slums from which they have little hope of ever escaping.

Cuban Agriculture

Via A.E. Lewis on the Distributism yahoogroup. An interesting article on Cuban agriculture at Harpers by Bill McKibben. Until the late 1980s, Cuba's agricultural economy was a Soviet wannabe, based on heavy mechanization and use of chemicals; the Soviet state-socialist model of agriculture, at least ideally, was as if Cargill or ADM had turned the farms of an entire country into one giant agribusiness plantation, and then the state had expropriated the corporation and put it under a state ministry. But with the collapse of the Soviet bloc in 1989 and of the USSR itself in 1991, and the cutoff of their "fraternal assistance," the Cuban economy was deprived of the inputs necessary for a Soviet-style agricultural model. There were drastic cutbacks in electric power and transportation, in the fuel and spare parts for those big gee-whizzy combines, and the oil necessary for chemical inputs. Left with an economy largely geared toward cash crops of sugar, and deprived of the Soviet-bloc markets for that sugar at subsidized prices, Cuba suffered something like a one-third reduction in average daily caloric intake. Many people lost considerable weight. But more than a decade later, McKibben notices a difference:

Now, just by looking across the table, I saw that Fernando Funes had since gained the twenty pounds back. In fact, he had a little paunch, as do many Cuban men of a certain age. What happened was simple, if unexpected. Cuba had learned to stop exporting sugar and instead started growing its own food again, growing it on small private farms and thousands of pocket-sized urban market gardens—and, lacking chemicals and fertilizers, much of that food became de facto organic. Somehow, the combination worked. Cubans have as much food as they did before the Soviet Union collapsed. They’re still short of meat, and the milk supply remains a real problem, but their caloric intake has returned to normal—they’ve gotten that meal back.

In so doing they have created what may be the world’s largest working model of a semi-sustainable agriculture, one that doesn’t rely nearly as heavily as the rest of the world does on oil, on chemicals, on shipping vast quantities of food back and forth.

I should add, I'm only interested in this at the level of technique. As far as I'm concerned, if that works it stands on its own, independently of Cuba's larger social-political system. If anything, the fact that something like this can be made to work in a state socialist prison like Cuba should, a fortiori, be promising for large grass roots alternative economics movements in comparatively free societies.

It's certainly an example of how quickly a capital- and chemical-intensive agricultural system can be decentralized and shifted to a labor-intensive and largely organic production model in the event of a sudden loss of inputs (can anyone say "Peak Oil"?).

Addenda: Buermann, at Flagrancy to Reason, recently posted on an Oxfam study of Cuba's economic transition after the Soviet aid cutoff, and drew similar general lessons for an energy-scarce economy.

Also on the subject of peak oil and economic decentralization: Bill G (not Gates) informs me that Robert Waldrop of the distributist list, founder of both the Oscar Romero Catholic Worker House in Oklahoma City and the Oklahoma Food Cooperative, will be a presenter at the re-localization and agraria conference at Community Solutions.

Robert will talk about the development of local food systems, which will be critical when the petroleum-dependent global industrial food system collapses. He will share his lessons from organizing the Oklahoma Food Cooperative, explain the role of urban agriculture, and enumerate the personal changes necessary for adapting to a local food system.

Merger Mania

Via Roy F. Moore on the distributism yahoogroup. Whirlpool is buying up Maytag for $2.7 billion.

One reason corporate mergers are feasible to this extent is that the financial transactions involve are, in effect, subsidized. Stock transactions involved in stock-swap mergers and buyouts are exempt from the capital gains tax. The interest on corporate debt accumulated in the process is also deductible.

Never mind whether capital gains and corporate income taxes are good or bad, as such. I think they're bad, too. But so long as they're in place, they should be paid at the same rate by all, without exempting some kinds of activities--especially when it amounts to a subsidy directed specifically to mergers and acquisitions.

Some free market advocates object to the use of the term "corporate welfare" for such tax loopholes. But the practical effect of such exemptions is exactly the same as if we started out with a tax rate of zero, and then imposed a punitive tax only on firms not engaged in such favored activities. Those who engage in the most capital- and R&D-intensive forms of production, and in mergers and acquisitions, are paying a disproportionately lower tax rate as a reward for doing so, and are thereby given an artificial competitive advantage at the expense of those not engaged in such activity.

Tuesday, August 23, 2005

Squatter Cities

Via Jesse Walker on the LeftLibertarian email list. A Reason review of Shadow Cities: A Billion Squatters, A New Urban World, by Robert Neuwirth; and Neuwirth's blog, Squatter City.

Neighborhood Power: Three Good Sites

Via Panchromatica. Sustainable Community Action Wiki, Project for Public Spaces, and Neighbourhoods blog.

Put the Public in "Public" Hospitals

Mother Jones Blog reports the rapid disappearance of public hospitals over the past decade. Their number has fallen by 16% in major U.S. cities (compared to 11% of private hospitals), according to a study by the Robert Woods Johnson Foundation, and the decline is even steeper in areas with the highest numbers of poor and uninsured.

Before anyone jumps in, let me say I'm no fan of government (even local government) ownership of hospitals. For one thing, the boards of directors on most municipal hospitals are run by the same kinds of prestige-salaried parasites, and have the same top-heavy organizational culture, as their private counterparts. In fact, the various private and public hospital boards and the local governments and chambers of commerce more than likely constitute an interlocking directorate, with a revolving door of personnel between them--probably go to the same country clubs and send their kids to the same prep schools.

My guess is that a lot of those "public" hospitals that disappeared were "privatized" by selling them to some hospital chain or other, on very sweet terms. I've seen the process in action myself. Sometimes there's even a little "tunneling" involved, with collusion between the buyer corporation and the "public" hospital CEO who's negotiating the sale. In other words, exactly the same kind of corporate looting that happens when a Third World city sells its municipal water off, under World Bank pressure, to GlobalMegaCorp LLC.

Public hospitals are a perfect opportunity for real privatization: what Larry Gambone calls "mutualizing" public services (turning them into consumer co-ops controlled by the clientele), and the Rothbardians call "homesteading."

There are some heroic efforts out there to reclaim the mutualist tradition of sick benefit societies, that insured a major part of the working class until government health insurance and the regulated "private" insurance cartels drove them out; the Ithaca Health system is a great example. Mutual health insurance is great, but as I've argued before, mutualizing the finance end of things isn't enough. Until delivery of service is also mutualized, healthcare will still fall under the same pathological organizational culture: control by the white coat license cartel, and emphasis on expensive high-tech treatments and patented drugs.

Instead, what we need is a model based on preventive and integrative medicine, and self-treatment, instead (as Dave Pollard says) of "on learned helplessness and dependence." We also need competition between multiple tiers of service, based on the consumer's preference and resources. A lot of free market advocates, in describing the causes of medical inflation, like to use the "food insurance" analogy to show why third party payments eliminate price competition: when your insurer only requires a small deductible for each trip to the supermarket, you'll probably buy a lot more T-bones. Unfortunately, what we have now is a system where the government, Big Pharma, and the license cartels act in collusion to make sure that only T-bones are available, the slaughterhouses get half their income from Medicaid and Medicare, and the uninsured wind up bankrupting themselves to eat. A lot of uninsured people would probably like access to a "barefoot doctor" who could treat things like physical trauma and basic infectuous diseases: somebody who could set fractures, or do an x-ray and a sputum culture and provide a round of generic antibiotics for pneumonia, and refer more serious cases on to an MD.

Communities (i.e. the people who live there, not the local government) whose hospitals are threatened need to stage a hostile takeover of those "public" hospitals and bring them under the control of the actual public, rather than the usual suspects from the Rotary Club. The hospital boards need to be taken over by real community representatives, representatives of the medical and nursing (and maintenance, housekeeping, dietary, etc.) staff, and representatives of the patient-members. And they need to put them under a radically different model of service.

Monday, August 22, 2005

Vache Folle on Political Anabaptism

Vache Folle has an interesting post on "Political Anabaptism" at St. George Blog:

For my part, I cling, perhaps psychotically, to the hope of creating a free society right here in the midst of the statist world. Just as the Kingdom of God is all around us and we do not see it, let's try to realize the Kingdom of Liberty (could they be the same Kingdom?) right under the nose of the state. Let us live our ideology insofar as we can, ignore the state as much as possible, and create alternative institutions and networks to meet our needs and draw us to together. Let our lives be our testimony to freedom.

I have begun to think of myself as a kind of political Anabaptist, and I think that the central tenets of Anabaptism could be applied to libertarians trying to live out their libertarianism in an unfree world.

He goes on to list draw some interesting parallels between the tenets of political and religious Aabaptism. My favorite:

Simplicity- If we live simply, we are less dependent on the state and state-corporate interests. We are more mobile. We will tend to trade more locally with people we know and meet face to face. We will tend to engage in more countereconomic activity. We will be less likely to be implicated in fraud and coercion or to be tied up with the state.
Hmmm. Sounds kinda like the First Church of Hardyville.

Good Stuff at Libertarian Labyrinth

Shawn Wilbur has a great post up at Libertarian Labyrinth blog on the various editions of William Greene's monumental Mutual Banking, along with his other writings on the subject. He's updated the William Greene page at his main Libertarian Labyrinth site, an amazing reference source on the history of American individualist anarchism.

He also describes a local "decentralized alternative education project" he's involved in:




My favorite part:


Aha! Actual learning through dialectic, as opposed to imparting the conventional wisdom under a pose of "objectivity." When you get this project well underway, Shawn, how about starting a cable news network?

There's a lot of other detail on various categories of course outlines, all of which are expected to be "heavy on sources for additional reading." Joe Bob says check it out.

Mutualist Political Economy

A kind reader brought it to my attention that I hadn't updated the order info page for Studies in Mutualist Political Economy. I got a new shipment in in early August, so I should have regular copies in stock for quite a while. If you're interested, go to the order page.

Mutualist Political Economy is also the subject of an upcoming review issue of Journal of Libertarian Studies.

Sunday, August 21, 2005

James L. Wilson on Left Libertarianism



Among his list of issues distinguishing left-libertarians from the mainstream libertarian right, this is my favorite:

3. a)A utilitarian capitalist ethic which "encourages" arts and inventions through federally-protected patents and copywrights and the government protection of "limited liabiity" in which stockholders are not personally responsible, and therefore indifferent, to the actions of their companies so long as they are profitable;

b) An absolutism in the inviolability of private land ownership, no matter when or how the land was acquired or how large the estate. Even though land is of limited supply and is required by all to live. Hence we have libertarians who advocate "flat taxes" or sales taxes both of which punish human activity, but are offended by the possibility that they pay rent to the community for the privilege of excluding people from their land. Exclusive control of land is a form of monopoly that is endorsed by many libertarians.

SEK3: Agorism Contra Marxism

Wally Conger has a great series going at Out of Step, in which he's keyed in a lot of material from Samuel Edward Konkin's Agorism Contra Marxism that was previously unavailable online. See Building a New Class Theory, Agorism Contra Marxism Part I, Part II, and Part III. See also Karl Hess on Marxism. Thanks, Wally!

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Cooperative Networking

Via Ecodema. There's an interesting article by Isabelle Halary on networking between cooperatives, at the Grassroots Economic Organizing website. It includes a section on Emilia Romagna.

Belated Carnival of the Un-Capitalists

The Carnival is on hiatus for the dog days of late summer, until things pick up on the Web again. In the meantime, though, here's a link to last week's edition at Shakespeare's Sister, which a family emergency prevented me from posting on time.

Saturday, August 20, 2005

Blogosphere of the Libertarian Left

If you look in the left column, you should see a new box for the Blogosphere of the Libertarian Left ring, recently started by Thomas Knapp. Definitely worth checking out! Most of the membership is more or less left-Rothbardian (that is, keeping up the tradition of Rothbard's and Hess' alliance with the New Left ca. 1970), in keeping with Tom's vision; but there's also a miscellaneous assortment of other left-decentralists, including old Tuckerites like me, and various and sundry land or money cranks. I believe most of us are what the Marxists call petty bourgeois deviationists.

Friday, August 19, 2005

Contract Feudalism Update

Larry Gambone already mentioned, on the VCM's discussion list, an NLRB ruling that permitted employers to prohibit employees from hanging out off the job. Here, from Confined Space, is the gist of it from a Harold Meyerson piece at the Washington Post:

On June 7 the three Republican appointees on the five-member board that regulates employer-employee relations in the United States handed down a remarkable ruling that expands the rights of employers to muck around in their workers' lives when they're off the job. They upheld the legality of a regulation for uniformed employees at Guardsmark, a security guard company, that reads, "[Y]ou must NOT . . . fraternize on duty or off duty, date or become overly friendly with the client's employees or with co-employees."

Meyerson invokes the specter of contract feudalism, without mentioning the word:

The brave new world that emerges from this ruling looks a lot like the bad old world where earls and dukes had the power to control the lives of their serfs -- not just when the serfs were out tilling the fields but when they retired in the evening to the comfort of their hovels.

And of course, the motivation is pretty clear: it's a lot harder to get an organizing committee going when workers are forbidden to get together and talk union off the job. Just like you need a policy against workers comparing their hourly wage. Same reason plantation owners forbade slaves to own drums, if you've ever read Roots. Nothing good ever comes of letting workers talk to each other.

My reaction on first seeing the story, as a market anarchist, was that employers were technically within their rights to make such demands. And no doubt somebody's ready to blurt out "but they're not forced to work there--if they don't like it, they can go somewhere else." As Lionel Hutz would say, that's the best kind of true: technically true. As the vulgar libertarians at ASI and The Freeman never tire of reminding us, people work in shit conditions because it's their "best available option."

The problem, from my standpoint, was that the bargaining power of labor in the present labor market lets them get away with it. And the more I've thought about it in recent days, the more it's occurred to me that this deserves some comment--not so much on the legal issue of whether the state should "allow" employers to exercise this kind of control, but on the question of what kind of allegedly free marketplace would allow it.

The question is, just how godawful do the other "options" have to be before somebody's fucking desperate enough to take a job under such conditions? How do things get to the point where people are lined up to compete for jobs where they can be forbidden to associate with coworkers away from work, where even people in shitty retail jobs are expected to be on-call 24/7, where they can't attend political meetings without keeping an eye out for an informer, where they can't blog under their own names without living in fear that they're a Google away from termination?

I'm not a friend of federal labor regulations. We shouldn't need federal regulations to stop this sort of thing from happening. In a free market where land and capital weren't artificially scarce and expensive compared to labor, jobs should be competing for workers. What's remarkable is not that the NLRB would issue such a ruling, but that the job market is so abysmal that something like this could become an issue in the first place.

A few decades ago, this wouldn't have even become an issue in the average blue collar job, because no self-respecting person would consider taking a job where the employer claimed such intrusive authority over his employees' private lives.

The only area of the job market where such things were expected, before the 1970s, was the white collar salariat of "professional" employees. (I'm leaving out anomalies like Southern sharecroppers and workers in company towns, where employees were considered to be "property" of the employer to a large extent; but by the middle of the 20th century, that was looked on as a relic of the past, not the wave of the future--as it's becoming now). For a good fictional example, take a look at Darren Stevens on the TV series Bewitched. He was a white collar "professional" in the advertising industry. Most of the comic situations on the show hinged on frequent "visits" to Darren's house by his boss, Larry Tate, a partner in the advertising firm, and Darren's need to entertain clients at home. Darren was constantly having to explain his unusual lifestyle to Larry, who obviously felt entitled to an explanation. And that intrusion in itself wasn't meant to be viewed as comical by the audience; it was just a set-up for all the wacky comic situations resulting from Samantha's witchcraft. The background itself was just based on a common understanding of what life was like for the "organization man."

And as a comedy of "how the other half lives," it was especially comical to the blue-collar manufacturing worker just because it was so unlike his own way of life. Imagine a master machinist in the IAM tolerating constant drop-in visits from a foreman, who felt entitled to demand explanations for this or that odd thing going on in the machinist's home! Such demands, to put it mildly, would likely have been met with corporal rebuke.

But except for a very small and shrinking remnant of unionized manufacturing workers, "we're all organization men now." The ethos of white collar "professionalism" has contaminated a major part of wage labor. It even extends to unskilled retail work, as indicated by the recent example of Wal-Mart.


“It shouldn’t cause any problem, if they [store employees] are concerned about their customers,” Knuckles said.

The unskilled service worker is expected to make the welfare of the customer the focus of his life, on and off the job, to an extent that only a small proportion of white collar professionals did four decades ago. The average wage-worker, in an increasing number of service jobs, is expected to define himself by his job in a way that only a small number of organization men did back then.

Things didn't just "get" this way. They had help. The reduced bargaining power of labor, and the resulting "contract feudalism"--i.e., the erosion of the traditional boundaries between work and private life, and increasing management control even of time off the clock--are the result of concerted political efforts over the past thirty years.

Monday, August 15, 2005

Geolibertarian Tax Policy

Jeff Darcy has an interesting think-piece on Georgist and Geolibertarian tax policy at Canned Platypus. Especially interesting is his discussion of Geolib ideas of access fees to natural resources, and "taxing bads not goods."

Fighting the Domestic Enemy: Follow-up

In the comments on Fighting the Domestic Enemy: You, Gretchen Ross directed me to this brilliant article by Jeff Wells:

But when [martial law] comes, will Americans recognize it?...



There will be no "Please Stand By" for America. No on/off toggle for totalitarianism will be thrown with Martial Law, and those expecting one may find themselves saying "Hey, this isn't so bad." America is passing through gradations of grey, the next nearly indistinguishable from the last. It's only in stepping back, in comparing now to then - five years ago; 10, 25 or 50 - that you realize how your eyes have adjusted to the dark.

Or how comfy that boiling water feels.

After the shock of a mass casuality event, and during the aftershocks of martial law, what will be the chief tone Homeland Security will want to set? It will be reassurance. Why? Because FEMA may have many camps, but it doesn't have enough to hold everyone. For the few to maintain power, the many need to participate in their own subjugation. They must be self-contained. And so, Michael Chertoff will attempt to alleviate the psychological sting of martial law, while he rubs the poison in, and invite Americans to "go about their business." (Privacy fears unjustified, Chertoff said this week.) It will be a soft sell of "temporary" measures, dictated by a supposed self-necessity. Americans will be encouraged to pretend that things are normal, or normal enough, and that the measures, while serious and unfortunate, don't affect them. And to keep it that way, many will watch what they say and watch what they do, and become detainees under self-monitored house arrest.

Any debate over the PATRIOT Act inevitably includes a challenge by one of its defenders to show an instance in which it's been abused, or explain how we are less free in any concrete way because of it.

In regard to the first question, all our information on how many times two of the more controversial provisions--the "sneak and peak" search, and library record investigations--have been used come from the government. It claims to have used them only in a small number of cases. But it's illegal, a prosecutable offense, to warn anyone that he's fallen victim to either kind of search. So we have no way of knowing whether these provisions of USA PATRIOT have been abused.

We also see stories on an almost daily basis on the abuse of PATRIOT provisions to go after drug dealers, gangs, and the like. It's called mission creep--an inevitable result when you give law enforcement more power in any area. Indeed, the USA PATRIOT expansion of search and seizure and RICO forfeiture was justified by its apologists on the grounds that "law enforcement already has these powers for fighting drugs." But the government shouldn't have had those powers for fighting drugs in the first place. Not only has the drug war, in and of itself, nearly turned the Fourth, Fifth and Sixth Amendments into toilet paper, militarized police culture, and generally taken us a long way toward a police state already. But once granted such powers to deal with the trumped-up "emergency" of drugs, the government attempts to use them as justification for granting it still further "emergency" powers, which it will abuse still further. Even before 9-11, Ass-crack was planning to use inter-jurisdictional law enforcemet task forces (patterned on drug task forces) to go after "illegal" gun owners, the same way they currently go after meth labs. And every time some liberal nanny statist proposes using RICO or roving wire-taps to go after some new form of anti-social behavior, like deadbeat dads, it dusts off the "we're already using it against drugs, anyway" argument.

Most importantly, though, I don't think it's that important whether we feel the pinch of the shoe on a daily basis. If the government hasn't yet used its powers to abridge our freedoms of speech and association in ways that the average person feels all that acutely, it nevertheless has the full legal power to do so. What matters is that the government now possesses the complete legal and administrative infrastructure of a police state, and can suspend the Bill of Rights with a simple stroke of the pen; the extent to which it finds it expedient to actually exercise those powers is beside the point.

I have been a passionate defender of gun rights for a long time now. I find many of the "slippery slope" arguments against gun control quite compelling. Licensing and records of gun ownership have been used, in many countries, as the prelude to bans on ownership of specific classes of firearms--often progressing incrementally--until most kinds of private ownership are either illegal or prohibitively expensive for the average citizen. And the government has extensive records of who owns whatever forms of firearms are still legal, so if it should decide to confiscate those, resistance is simply not feasible. Once the government knows who owns what , and where they live, everybody's gun rights are held at the government's discretion. The whole point of an armed citizenry is to provide a bulwark of defense against an out-of-control government. But when the exercise of gun rights is subject to such extensive licensing, tracking and surveillance that the government has the capability of disarming the citizenry, piecemeal, at will, gun rights cease to be rights and instead become privileges granted by the government as a concession of grace.

Ironically, many current right-wing apologists for USA PATRIOT are the same Freepers who used to find "slippery slope" arguments against gun control so persuasive. The Red State folks routinely (and rightly) laughed themselves into a rupture when Million Mom types asked them how the Brady Law interfered with their right to ordinary firearms for hunting and home defense. Our rights are defined, not by what the government currently chooses to do, but by what it can do. Apparently, those "I love my country but fear my government" stickers came off the pickups on Inauguration Day 2001. The same people who so feared and loathed Auntie Jen were A-OK with Crisco John. (Of course, many of the left-wing folks who object so strenuously to USA PATRIOT are the same ones who were on the warpath after Oklahoma City and thought those people at Waco had it coming to them). The partisanship is pretty astounding, considering that so much of Crisco John's anti-liberty agenda was stuff that Auntie Jen had tried and failed to get through Congress, and that pretty much the same bipartisan police state coalition (Schumer, Feinstein, Hatch, Shelby, ad nauseam) supported the jackbooted initiatives of both administrations.

The same "slippery slope" argument applies to all other areas of civil liberty. Consider the extent to which our speech, movement, and association is already subject to routine tracking and surveillance; then consider the extent to which the "only the guilty need fear" crowd want to expand such tracking and surveillance. And consider the ways that computer, eavesdropping, and biometric technologies interact to enable such tracking and surveillance to an unlimited extent. Imagine digital cameras with face-recognition technology routinely checking passers-by against a database of "suspected terrorists," stoplight cameras subjecting your license plate to similar routine checks a dozen times on your way to work or the grocery store, and a bar-code scanner putting you through the same thing every time you write a check. Every time you interact with the camera or the scanner, or go through the internal passport (excuse me, National ID) check at an airport or bus station, you'll be checked against that database of suspected terrorists (which also interfaces with your bank records, credit card purchases, and internet history). The world I'm describing is a dead certainty with the next ten or fifteen years, unless something radical is done to prevent it.

In the real world of our past, the U.S. government has more than once outlawed radical political parties, conducted mass political arrests, or even practiced preventive detention. As one example, consider the Palmer Raids:

The raids are named after Alexander Mitchell Palmer, United States Attorney General under Woodrow Wilson. Palmer stated his belief that Communism was "eating its way into the homes of the American workman," and that Socialists were responsible for most of the country's social problems.

The crackdown on dissent had actually begun during World War I, but accelerated significantly after the end of the war. The Russian Revolution of 1917 was a background factor. Congress in 1919 refused to seat Socialist representative from Wisconsin, Victor L. Berger, because of his views concerning the war. With strong support from Congress and the public, in 1919 Palmer clamped down on political dissent.

On June 2, 1919 a number of bombs were detonated in eight American cities, including one in Washington that damaged the home of Palmer and another one reportedly detonating near Franklin Roosevelt. Following this, Palmer and his 24-year-old assistant J. Edgar Hoover orchestrated a series of well publicized raids against apparent radicals and leftists under the Espionage Act of 1917 and the Sedition Act of 1918. Victor Berger was sentenced to 20 years in prison on the charge of sedition. (The Supreme Court of the United States later threw out that conviction.) J. Edgar Hoover was put in charge of a new division of the Justice Department's Bureau of Investigation, the General Intelligence Division. By October 1919, Hoover's department had collected 150,000 names in a rapidly expanding database.

Once Palmer and Hoover had a database 'gameplan,' starting on November 7, 1919, Palmer's men smashed labor union offices and the headquarters of Communist and Socialist organizations without search warrants, concentrating on foreigners. In December 1919, Palmer's agents gathered 249 of the arrestees, including well-known radical leaders such as Emma Goldman and Alexander Berkman, and placed them on a ship bound for the Soviet Union (The Buford, called the Soviet Ark by the press). In January, 1920, another 6,000 were arrested, mostly members of the Industrial Workers of the World union. During one of the raids, more than 4,000 radicals were rounded up in a single night. All foreign aliens caught were deported. All in all, by January 1920, Palmer and Hoover organized the largest mass arrests in U.S. history, rounding up at least 10,000 Americans.

If WMDs are used on American soil, or there's even another spectacular 9-11 scale attack, do you really think it's that unlikely the government will use a partial declaration of emergency to justify preventive detention of "subversives"? The McCarran Internal Security Act of the late 1940s explicitly provided for it. They probably wouldn't round up most people within the "Chomsky radius" (Samuel Edward Konkin's colorful phrase for the elite media's bounds of just barely permissible opinion). Readers of Mother Jones and In These Times on the left, and The Spotlight on the right, would probably be left at large (although their names would naturally remain in a database for "further questioning" if necessary). But groups like the I.W.W., PETA, and Greenpeace might well be rounded up as "terrorists," along with right-wing nutter organizations that believe they actually need guns to protect themselves against an out-of-control government. And with such an object lesson in the consequenes of "going too far" in your radicalism, I suspect a lot of the folks who read Mother Jones might just start "watching what they say" to be extra-sure they didn't cross that line. Heck, they might even let those MoJo subs lapse.

Had Woodrow Wilson had the technologies described above during the Red Scares, or FDR during the Japanese internments, those arrests would have been a lot more thorough and efficent, don't you think? And don't even think about what Himmler or Beria would have done with them. Here's a hint: don't trust any government with powers you wouldn't entrust to Hitler or Stalin (or Woodrow Wilson). If you're a yellow dog Democrat, don't give Auntie Jen any powers you wouldn't feel comfortable with in Crisco John's hands. If you're a Freeper, don't give Bush any powers you wouldn't gladly give Hillary. You never know what the future will bring.

I'm a Wobbly, a member of an organization already once decimated by mass arrests during one of those past waves of repression. I'm on the Loompanics mailing list, and have two volumes of The Poor Man's James Bond (something I'm sure doesn't fit the FBI's definition of "legitimate defensive needs," any more than the Chinese PLA fits the Pentagon's). Considering how closely PATRIOT's "economic terrorism" provisions resemble direct action on the job, and considering federal law enforcement's hard-on against the anti-globalization movement, I believe any detention round-up list that reached even into the tens of thousands would probably include me. Would it include you?

Back to my main point. As Rudolf Rocker said, liberties are not granted by governments. They are forced on governments from below. The only secure basis for liberty is the government's fear of violating it. If we're not yet at the point where we hold all our rights as a grant of privilege from the government, and can have them taken away at will, we're very near it.

Thursday, August 11, 2005

Brad DeLong on Labor's Long Retreat

Here's the Brad DeLong commentary I mentioned in the last post. Thanks to Adam, in an earlier comment thread, for bringing it to my attention.

There are, broadly speaking, three interpretations of what went on:

The first is the interpretation of a whole bunch of finance economists starting from Adolf Berle and Gardiner Means.... It is that a whole bunch of changes in corporate law and financial practice in the early twentieth century culminating in the New Deal shifted a great deal of practical power away from "owners" and to "managers.".... [M]ost of the time managers did what they wanted, chose their own successors, and set corporate policy with not that much attention to maximizing company stock prices either in the short run or the long run....

Now this does not mean that shareholders were "exploited." Managers did care about the level of dividends and the price of the stock--it was a big loss of face at the country club to report poor financial numbers. But managers cared about other things as well--being pillars of their community, indulging in natural benevolence toward their subordinates, and avoiding nasty headlines in the local press, among others.

Now if you're a finance economist, you see this system as "inefficient": companies are wasting a lot of money by employing too many people in jobs that are cushier than they have to be, and while this is good for the workers of the company it also raises costs and prices, and so the gains to workers are outweighed by the losses to shareholders (who collect lower dividends) and consumers (who pay higher prices). If you're John Kenneth Galbraith, you see this technostructure--this technocratic corporate elite of managerial capitalism--as broadly a good thing, because managers are interested in the fundamentals of production and human relations rather than in prettying up their numbers for Wall Street road shows.

In any event, this system comes to an end in the 1980s as Wall Street figures out how to successfully undertake hostile takeovers, and as the threat of being subject to a hostile takeover pushes even those managers who would have been very happy under the old system to pay more attention to the bottom line as a way of boosting current stock prices and making the benefits to outsiders' undertaking a hostile takeover much less....

I think Berle and Means, and Galbraith, seriously exaggerated the separation of ownership from control. I tend to agree with C. Wright Mills that the managerial New Class carried out a corporate transformation of the capitalist class, but remained clearly a junior member of the power elite. The billionaire plutocracy--people like David Rockefeller--still exercise control over the corporate economy, in all sorts of direct and indirect ways. There's an element of truth to the Berle-Means thesis, though. Owner control of the corporation is something that definitely ebbs and flows over time. Although it was never as weak as Berle and Means made out, it was probably at its low point in the early post-WWII period, when most new investment was internally financed from the revenue stream and finance capital wasn't a major force toward concentration. The reemergence of finance-capital dominance in the '80s, to a level of importance comparable to the turn of the 20th century, put senior management back under the whip again.

The second interpretation is one that has been pushed by Larry Summers and Andrei Shleifer. It notes that organizations run on patterns of long-term trust and confidence, and that it is devastating to an organization's effectiveness for those at the top to break the established implicit long-run bargains that the organization runs on. Under this interpretation, the paternalistic-employer-and-civic-booster model of the American corporation that dominated the first post-WWII decades was an effective and efficient system of corporate organization. Come the hostile takeover, however, the corporate raiders can replace the old management that had made and kept the implicit long-run bargains with new managers who have no attachment to them, and are willing to do the bidding of the shareholders and the takeover artists. This "breach of trust" moves us to a system of corporate organization that is less efficient and effective for society as a whole--workers who don't trust their bosses won't spend time learning things that are important if you work for this particular company but not in the larger job market, firms won't invest in the community in an attempt to make it a place where workers would like to stay, et cetera. But this new form does expropriate a lot of the value of the firm that was shared with workers-as-stakeholders, and transfer the value to the bosses and the shareholders.

There is also a third interpretation: that the coming of the Volcker disinflation, the dominance of central bankers, and the elevation of price stability over full employment as a goal of governance was bound to weaken American workers' power enough to make the Kodak model clearly less profitable than the more "Hard Times" alternative.

In Fed-speak, "inflationary pressure" translates to "increased bargaining power of labor." Sometimes the equation of the two is quite explicit. For example, back in the 1990s Alan Greenspan persuaded the Fed to keep interest rates low despite record low unemployment, because the job insecurity in the tech economy was almost as good as high unemployment as a way to reduce the bargaining power of labor. In 1996, 46% of workers at large firms were fearful of layoffs, compared to only 25% in 1991. And, Greenspan added,

The reluctance of workers to leave their jobs to seek other employment as the labor market tightened has provided further evidence of such concern, as has the tendency toward longer labor union contracts. For many decades, contracts rarely exceeded three years. Today, one can point to five- and six-year contracts--contracts that are commonly characterized by an emphasis on job security and that involve only modest wage increases. The low level of work stoppages of recent years also attests to concern about job security. ("Testimony of Chairman Alan Greenspan," U. S. Senate Committee on Banking, Housing, and Urban Affairs, January 21, 1997)
So the main spur to another round of Fed belt-tightening, apparently, is increasing wage demands by labor. As that Tom Tomorrow cartoon described the process, "Greenspanman" (in green cape with dollar signs) comes to the rescue when worker uppityness reaches unacceptable levels, by pulling the lever on his interest rate machine and throwing a couple of million people out on the street.

Fighting the Domestic Enemy: You

Gretchen Ross has an unsettling piece at UnCapitalist Journal on the abuse of the government's new powers against "domestic terrorism" to go after animal rights activists and "eco-terrorists."

Unfortunately, this is nothing new. The government has been targeting the anti-globalization left and other domestic political enemies, under cover of ostensible "counter-terror" policies, for some time.

The use of "counter-terror" policy to justify domestic police statism originally seized, in the wake of the Oklahoma City bombing, on the pretext of right-wing extremism: the so-called "patriot" or "militia" movement. Clinton's counter-terrorism act of 1996, arguably more dangerous than anything since done by Ashcroft (but give it time), gave the President blanket authority to declare any organization "terrorist" by executive fiat, and then to seize its assets without due process of law. The latter provision has been used by the government since 9-11, by the way: the Justice Department has used the threat of civil forfeiture to force ISPs to close down a number of sites, like (for example) IRARadio, which archived interviews with Sinn Fein leaders. The controversial shutting down of Islamic charities, and the threats of stripping citizenship by administrative fiat from contributors to such charities (which resurfaces periodically in leaked draft legislation), are all built on a legal foundation established by Bill Clinton.

In December 1999, with the Seattle protests, the U.S. government turned on a dime and treated the anti-globalization movement as enemy number one. (Jim Redden, "Police State Targets the Left" The Zoh Show: Newsbytes (May 2, 2000))

It's quite understandable. Even before the post-Seattle movement caused such panic, RAND analysts were expressing grave concern over the possibilities of decentralized "netwar" techniques for undermining elite control. David Ronfeldt saw ominous signs of such a broader movement in the global political support network for the Zapatistas. Loose, ad hoc coalitions of affinity groups, organizing through the Internet, could throw together large demonstrations at short notice, and "swarm" the government and mainstream media with phone calls, letters, and emails far beyond their capacity to absorb. Ronfeldt noted a parallel between such techniques and the "leaderless resistance" advocated by right-wing white supremacist Louis Beam, circulating in some Constitutionalist/militia circles (The Zapatists "Social Netwar" in Mexico, MR-994-A (1998)). These were, in fact, the very methods later used at Seattle and afterward. Decentralized "netwar," the stuff of elite nightmares, was Huntington's "crisis of governability" on steroids.

Paul Rosenberg, in "The Empire Strikes Back," recounts in horrifying detail the illegal repression and political dirty tricks used by local police forces against anti-globalization activists at protests in 1999 and 2000. There have even been some reports that Garden Plot (see below) was activated on a local basis at Seattle, and that Delta Force units provided intelligence and advice to local police. (Alexander Cockburn, "The Jackboot State: The War Came Home and We're Losing It" Counterpunch May 10, 2000; "US Army Intel Units Spying on Activists" Intelligence Newsletter #381 April 5, 2000)

Seizing on the opportunity presented by the 9-11 attacks, Ashcroft's Justice Department was able to push through (via the USA PATRIOT Act) a whole laundry list of police state measures desired by the FBI that Congress had been unwilling to swallow five years earlier. A good many of the most objectionable features of USA PATRIOT were provisions in the original version of Clinton's counter-terror bill that wound up on the cutting room floor in 1996.

Although Al-Qaeda was ostensibly the target of these sweeping new powers, the powers granted under USA PATRIOT have actually been used far more for expanding existing "wars" on drugs and gangs than against Islamist terrorists.

Worse, there are indications that the left-wing anti-globalization movement figures even more prominently than drugs and gangs in the federal enemies list. An especially interesting figure in this regard is John Timoney. As Philadelphia Police Commissioner, he figured prominently in Rosenberg's account of the police riots at the Republican Convention in 2000. There he made what was arguably the most drastic, thorough, and creative use of police spying, harassment, and preventive arrest of activists on trumped up charges, of any local police official involved in fighting the post-Seattle movement. As police chief in Miami, he supervised the police riots against the anti-FTAA protests there.

Timoney has an intense and abiding hatred, not to mention fear, of the anti-globalization movement--or what he calls the "international anarchist conspiracy." He advocated the use of RICO and harsh federal law enforcement tactics to break the anti-globalization movement.

After 9-11, he was a close political associate of Tom Ridge (who had been governor of Pennsylvania and provided political support to Timoney during the events of August 2000), and his name has resurfaced periodically in the mainstream press as a potential appointee to the upper ranks of Homeland Security.

It's also interesting how closely the "economic terrorism" provisions of USA PATRIOT bear on the direct action tactics used by the Wobblies and other radical unions. They could be used, quite effectively, in the same manner as the old "criminal syndicalism" statutes of the post-WWI "Red Scare." For that matter, any damage to property designed to have a political effect is classified as "economic terrorism": any group present at any protest where property damage takes place, whether or not that specific group endorsed or participated in the damage, can fall afoul of USA PATRIOT. Strictly speaking, the participants in the Boston Tea Party could have been treated as "terrorists" under current law.

All these events of the past decade, horrible as they are, are really just the culmination of 35 years of creeping authoritarianism. U.S. policy elites decided, in the aftermath of the great "civil disturbances" of the 1960s (the mass antiwar and civil rights demonstrations and the urban riots), that such levels of violence would never again be tolerated.

In response to the antiwar protests and race riots, LBJ and Nixon began to create an institutional framework for coordination of police state policy at the highest levels, to make sure that any such disorder in the future could be dealt with differently. This process culminated in Department of Defense Civil Disturbance Plan 55-2, Garden Plot, which involved domestic surveillance by the military, contingency plans for military cooperation with local police in suppressing disorder in all fifty states, plans for mass preventive detention, and joint exercises of police and the regular military. Senator Sam Ervin, of the Subcommittee on Constitutional Affairs, claimed that "Military Intelligence had established an intricate surveillance system covering hundreds of thousands of American citizens. Committee members had seen a master plan--Garden Plot--that gave an eagle eye view of the Army-National Guard-police strategy." (Of course, much of the legal and administrative apparatus needed for preventive detention of "subversives" had been in place since the McCarran Internal Security Act of the Truman era, and was heavily augmented by Kennedy's series of executive orders providing for martial law and federal administration of the economy in the event of "national emergency.")


...Garden plot [subsequently] evolved into a series of annual training exercises based on contingency plans to undercut riots and demonstrations, ultimately developed for every major city in the United States. Participants in the exercises included key officials from all law enforcement agencies in the nation, as well as the National Guard, the military, and representatives of the intelligence community. According to the plan, joint teams would react to a variety of scenarios based on information gathered through political espionage and informants. The object was to quell urban unrest. (Frank Morales, "U.S. Military Civil Disturbance Planning: The War at Home" Covert Action Quarterly, Spring-Summer 2000)

Meanwhile, by the 1970s, the corporate-state elite was reassessing the effectiveness of the New Deal "social compact" and of corporate liberalism in general. They concluded from the 1960s experience that the social contract had failed. Besides unprecedented levels of activism in the civil rights and antiwar movements, and the general turn toward radicalism among youth, the citizenry at large also became less manageable. There was a proliferation of activist organizations, alternative media, welfare-rights organizations, community activism, etc. Together, they amounted to what Samuel Huntington called a "crisis of governability." Increased prosperity for the middle class had failed to buy popular acquiescence.

The wave of wildcat strikes in the early '70s indicated that the business unions were no longer effective in restraining their own rank and file or enforcing management control of the work process. At the same time, the increased bargaining power of labor and the expanding welfare state were leading to the "accumulation crisis" of James O'Connor: the business press of the 1970s was full of alarmist commentary on the looming "capital shortage," and the need for a massive shift of resources from consumption to accumulation.

The result of this reassessment was a broad change in elite thinking from corporate liberalism to the current neoliberal consensus. From the 1970s on, corporate leadership went into full union-busting mode, exploiting all the latent possibilities in Taft-Hartley. By the end of the decade, the Fed's policy of fighting inflation at the cost of increased unemployment (if, that is, unemployment weren't an added feature rather than a bug) further reduced the bargaining power of labor. The new vulnerability of corporations to hostile takeover reduced the autonomy of management, and increased pressure to maximize profits by any available means. The result was a virtual cap on real wages for the past thirty years, with all productivity increases instead being translated into exponential increases in corporate profits and management compensation. The comments in this paragraph, by the way, are based on some interesting commentary by Brad DeLong on the various structural causes of labor's long retreat. I'll follow this post up with an excerpt.

The welfare state was scaled back, at the same time as direct and indirect state subsidies to accumulation were increased.

There was simply no way that this new austerity policy--the moral equivalent of "structural adjustment"--could be imposed on the public without a major increase in political authoritarianism. Business journals predicted frankly that freezing real wages would be hard to force on the public in the existing political environment. For example, an article in the October 12, 1974 issue of Business Week warned that

Some people will obviously have to do with less.... [I]ndeed, cities and states, the home mortgage market, small business and the consumer will all get less than they want.... [I]t will be a hard pill for many Americans to swallow--the idea of doing with less so that big business can have more.... Nothing that this nation, or any other nation has done in modern history compares in difficulty with the selling job that must now be done to make people accept the new reality.

The only way to accomplish this massive shift of resources, as Samuel Huntington pointed out in The Crisis of Democracy, was by insulating the state from democratic pressure. The task of state capitalist elites, in the face of this crisis, was to restore that necessary "measure of apathy and noninvolvement" that had existed before the 1960s, and thus to render the system once again "governable."

As policy elites attempted to transform the country into a two-tier society, a kinder and gentler version of the Third World pattern, the threat of public discontent forced the government to greater and greater levels of authoritarianism. The elite was forced, as Richard K. Moore put it ("Escaping the Matrix"), to import techniques of social control from the imperial periphery for use against the core population.

The most obvious means of social control, in a discontented society, is a strong, semi-militarized police force. Most of the periphery has been managed by such means for centuries. This was obvious to elite planners in the West, was adopted as policy, and has now been largely implemented....

So that the beefed-up police force could maintain control in conditions of mass unrest, elite planners also realized that much of the Bill of Rights would need to be neutralized.... The rights-neutralization project has been largely implemented, as exemplified by armed midnight raids, outrageous search-and-seizure practices, overly broad conspiracy laws, wholesale invasion of privacy, massive incarceration, and the rise of prison slave labor.

(See also Sam Smith, "How You Became the Enemy").

With the help of the Drug War, and assorted Wars on Gangs, Terrorism, etc., the apparatus of repression continued to grow. The Drug War has turned the Fourth Amendment into toilet paper; civil forfeiture, with the aid of jailhouse snitches, gives police the power to steal property without ever filing charges--a lucrative source of funds for helicopters and kevlar vests. SWAT teams have led to the militarization of local police forces, and cross-training with the military has led many urban police departments to view the local population as an occupied enemy. (Diane Cecilia Weber, "Warrior Cops: The Ominous Growth of Paramilitarism in American Police Departments" Cato Briefing Paper No. 50, 26 August 1999.)

Now local police forces and the military are introducing crowd-control technologies based on high-pitched noise or the electronic infliction of pain: in effect, mass-tasering of hundreds or thousands of people at a time. Considering U.S. elites are so obviously terrified of their own populations, and preparing so diligently for the high-tech repression of popular unrest, it makes you wonder what else they've got up their sleeves. What with the last days of the housing bubble, the dollar's untenable position as global reserve currency, and the bankruptcy "reform" aimed at forcing as many people as possible into Chapter 13 debt slavery, you have to wonder: do they plan to fence off entire communities with barbed wire, turn them into debtors' prisons, and march the populace out into the fields under armed guard to pick cotton for ADM or Cargill? As somebody once wrote in an Atrios comment thread, I'm starting to feel like I'm living in a Paul Verhoeven movie based on a Phillip K. Dick novel.

SWAT teams, interestingly, were pioneered in California under Reagan, at the time Louis Giuffrida was head of the National Guard. At the time, Giuffrida and Reagan were both enthusiastic supporters of joint military-police exercises for dealing with "civil disturbances" under Garden Plot. In the '80s, when Giuffrida was head of FEMA, he worked with Oliver North to draw up plans for martial law in the event of a "national emergency." They worked together on the Readiness Exercises 1983 and 1984 (Rex-83 and Rex-84), which included mass detention of suspected "terrorist subversives" under the emergency provisions of Garden Plot. The hypothetical civil disturbance/insurrection scenario these emergency exercises were supposed to be coping with, by the way, was a series of massive antiwar demonstrations in response to a U.S. military invasion of Central America.

Lt. Col. Oliver North... helped draw up a controversial plan to suspend the Constitution in the event of a national crisis, such as nuclear war, violent and widespread internal dissent or national opposition to a U.S. military invasion abroad. (Alfonso Chardy, "Reagan Aides and the 'Secret' Government," Miami Herald, July 5, 1987)

So we're back to where we started: terrorism=subversion=disloyalty=un-Americanism. And all four translate, in practice, into threatening the stability of state capitalist domination.